Posted by holely > 2021-09-28 15:31 | Report Abuse

Agree PE cannot be used but seems like the writer is justifying a "BUY" on gloves based on margin? Should follow up with a target purchase price or at least what target price based on future projections. Just another TLDR article with numbers but no worthy insight.

Posted by TradeVSA > 2021-09-28 15:40 | Report Abuse

Noted, thanks for the comment and feedback

Posted by AdCool > 2021-09-29 12:32 | Report Abuse

I think we should compare the current financial status with 2019. Now the total asset is 9.856 bil vs 5.648 bil, majority due to investment securities (1.6 bil), inventory (1.18 bil) and Cash (878 mil) and also higher property, plant and equipment due to expansion. Most of these are liquid assets which can be rolled as cash for operation if need to.

As for debts, it has reduced significantly as below:

Current liabilities (loans and borrowing) down from 1.041 bil to 312.7 mil.
Non current liabilities (loans and borrowing) down from 1.379 bil to 146 mil.

All these are made possible due to the superprofit earned in 2020 and 2021. ASP could normalized in 2022 and with such healthy financial footing, the market has been wrong in valuing Top Glove as pre Covid times. Top Glove that was making rm500 mil profit per annum with 2.5 bil loan and borrowing and just around 300 mil cash in 2019 in comparison to Top Glove that would make around RM800 mil profit per annum with just 500 mil loan and borrowing and around 4 billions cash in 2022. How could the valuation remain the same then purely based on ASP? The interest alone was 61 mil per quarter and 4 quarters would be 250 mil which already covered 2.5 quarters profit back in 2019.

Posted by VTrade > 2021-09-30 12:03 | Report Abuse

How to achieve income 10k then?